CMA CGM: 2023 annual financial results reflect a year of contrasts for the transport and logistics industry
2024-02-26 12:17

CMA CGM: 2023 annual financial results reflect a year of contrasts for the transport and logistics industry

The following release was published by CMA CGM:

  • Gradual deterioration in the maritime shipping environment throughout 2023, including in the fourth quarter, causing an anticipated year-on-year decline in revenue and operating profit.
  • A year shaped by the Group’s sustained expansion and investment drive, with new acquisitions across the transport and logistics value chain and capital projects to support decarbonization.
  • A robust Group positioned to weather an uncertain 2024.

Commenting on the results for the year, Rodolphe Saadé, Chairman and Chief Executive Officer of the CMA CGM Group, said:

“As our sector normalized, the Group's performance remained solid in 2023. Shipping market conditions deteriorated progressively during the year. Our results are down as we expected. Logistics, on the other hand, is proving more resilient, and accounts for a significant part of our business. Our Group now stands on two solid pillars, which will enable us to weather cyclical changes more efficiently. Backed by our financial strength and the commitment of our employees, we will continue to invest in the transformation of the Group, particularly decarbonization and artificial intelligence, in order to pursue our sustainable and profitable development.”

During its meeting, the Board of Directors approved the consolidated financial statements for the year ended December 31, 2023.

2023 highlights Demonstrating resilience in a gradually worsening maritime shipping environment After two extraordinary years in 2021 and 2022, the transport and logistics industry experienced a year of transition and normalization in 2023. In late 2022, widespread inflation began to weigh on household purchasing power in Europe and the United States, dampening demand for consumer goods. The decline in demand was exacerbated by major inventory reductions in the first half of 2023, as supply chains readjusted.

2023 also saw a slowdown in economic growth after the strong post-pandemic recovery, with rising inflation and a shift in consumer spending to services. These factors pushed down demand for shipping and logistics services.

Despite this challenging environment, the CMA CGM Group leveraged its financial strength to pursue its strategy of investing in its shipping, port, logistics and air freight capabilities, while maintaining its commitment to the energy transition.

Maritime shipping and port terminals: a year of normalization, with deteriorated conditions in the final quarter
For the maritime shipping industry, 2023 was a year of contrasting halves. Behind the relative stability in volumes transported by the Group’s shipping lines over the full year (up 0.5%) lay major disparities between the first and second halves, as well as among the main shipping routes.

In the first half, container volumes fell by a sharp 2.7% due to sluggish demand for consumer goods and the impact of inventory reduction. The supply-demand mismatch weighed on freight rates.
The second half saw a rebound in demand, which increased volumes 3.8% over the period. Nevertheless, freight rates remained under pressure due to an influx of new shipping capacity, which maintained the imbalance between supply and demand. In comparison to 2022, 2023 volumes carried by the Group on the North-South routes (up 4.2%) and intra-regional lines (up 3.3%) proved more resilient than on the East-West routes (down 2.7%), thanks in particular to the sustained robust growth of certain emerging economies.

2023 Operating and financial performance

Full-year 2023 revenue stood at USD 47.0 billion, a 36.9% year-on-year decline that was primarily attributable to the deteriorating conditions in maritime shipping markets.

EBITDA came to USD 9.0 billion, representing an EBITDA margin of 19.2% that was down 25.5 points on the year before.

Net income, Group share amounted to USD 3.6 billion.

With net debt of USD 3.7 billion, the balance sheet is solid and provides a firm foundation for the Group to weather the cyclical downturn with confidence, while continuing to invest.

In all, 21.8 million TEUs were carried over the year, up 0.5% from 2022. Revenue from the maritime shipping operations fell by 46.7% year-on-year, to USD 31.4 billion.

EBITDA stood at USD 7.4 billion, versus USD 31.6 billion the year before. EBITDA margin contracted by 30.1 points to 23.6%, impacted by the 47% drop in average revenue per TEU for the year to USD 1,437.

Source: CMA CGM